ERP Comparison as the Foundation for ERP Selection

The result of ERP selection usually is a contract with the future ERP supplier, which defines the right of use (licence contract), implementation (consulting contract) and the maintenance services (maintenance agreement) as well as records the terms and conditions. Leading up to this contract is a multi-step process in order to identify the best matching ERP solution and the best ERP vendor. Part of this process is a structured ERP comparison, because you have to find out which of the more than 1.600 ERP solutions is the best matching for your company?

ERP comparison within a selection project contains the following steps:

Determine your own requirements for ERP comparison

In the end, ERP software is a tool to support business processes. Keeping in mind the project aims, the technological constraints (e.g. IT strategy) and the planned application area of the ERP solution, the requirements are deduced from the business processes and informational flows and recorded in a requirement specification sheet. In many ERP projects this presupposes a process analysis which, however, can vary significantly as to its necessary breadth and degree of detailing.

The requirement specification sheet serves as a basis for ERP comparison. The requirements must be checked against the performance profiles of the ERP solutions. In order to avoid extensive customization programming, it pays to select solutions which cover most of the requirements in their standard scope of delivery.

Narrow Down the Market for ERP Comparison

Due to the ERP market's heterogeneity it is important to short list a number of solutions for the ERP comparison because otherwise a detailed analysis with the systems would not be possible. A first overview can be had at trade fairs and specialised conferences or from vendor directories. However, evaluation platforms like IT-Matchmaker offer more detailed and valuable information for a structured ERP comparison.

During the first phase of ERP comparison, one should concentrate on the technological and functional requirements. Since the selection of the ERP vendor resp. retailer is also of great importance in this context, one should examine information on the vendors' references and experience in specific industries.

Tendering as Final Step of ERP Comparison

In the tendering phase, the requirements are transmitted to the ERP vendors. They in turn submit their quotes and their suggestions for critical issues. A first cost estimation is usually submitted taking into acoount expenses for necessary customisation.

Of course, the costs are a decisive factor for ERP comparison. When tendering via IT-Matchmaker, ERP vendors are asked to state costs for specific items, which can then be compared directly and on a one-to-one basis.

Detailed specification and contract negotiations

An ERP selection process is concluded by the negotiation of ERP contracts with one or up to three vendors. More complex ERP projects first require a more detailed description of company-specific customisations of the software. Only then the ERP vendor can estimate the programming and consulting expenses. Sometimes there is also a legal examination of the contract and the project financing is discussed with banks or leasing agencies.

The actual investment decision within an ERP project can be pictured as a "funnel": Starting from the requirement specification sheet, the available ERP software packages and vendors are compared roughly and then the market is narrowed down successively. In the course of ERP comparison the main focus and the character of the investment decision change from purely technological aspects to functional to the vendor's know-how and service offer. to costs and so on.